INDONESIA Law and Practice Contributed by: Ira A Eddymurthy and A Charlie R Malessy, SSEK Law Firm
no decision by the BOC can be unilaterally made by the president commissioner. Instead, deci - sions must be made collectively by the BOC in accordance with the provisions stipulated in the company’s articles of association. 4.3 Board Composition Requirements/ Recommendations As provided under the Company Law, limited liability companies in Indonesia are required to have at least one director and one commission - er. There are no stipulations regarding the maxi - mum number of directors and commissioners. However, certain companies may be required to have more than one director and commissioner. The requirement to have more than one director and commissioner is typically implemented by the OJK. For instance, public companies and companies carrying out financing activities are required to have at least two directors and two commissioners. Banks and insurance compa - nies are required to have at least three directors and three commissioners. 4.4 Appointment and Removal of Directors/Officers As a general rule, the appointment of a mem - ber of the BOD is conducted through a GMS, in accordance with Article 94, paragraph 1 of the Company Law. Directors may be appointed for a specific term and may be reappointed. Each appointment is effective on the date specified by the GMS or, in the absence of such specification, on the date the GMS is deemed closed. Any individual may be appointed as a member of the BOD provided they have legal capacity and have not, within the previous five years: • been declared bankrupt;
• served as a member of a BOD or BOC deemed responsible for a company’s bank - ruptcy; or • been criminally convicted of an offence detrimental to state finances or related to the financial sector. Further provisions regarding the appointment, replacement and dismissal of BOD members may be outlined in the company’s articles of association, subject to the minimum quorum requirements. The procedures for the dismissal of BOD mem - bers are governed by Article 105 of the Company Law, which stipulates that BOD members may be dismissed at any time through a GMS provid - ed there is a valid reason for such dismissal and the director concerned is given an opportunity to defend themselves, unless the director does not object to the dismissal. The dismissal becomes effective on the date the GMS is deemed closed or on a specific date determined by the GMS. A member of the BOD may be suspended by the BOC for a specified reason as outlined in Article 106, paragraph 1 of the Company Law. During suspension, the BOD member is not authorised to perform their directorial duties. Within 30 days of the suspension, a GMS must be convened to decide whether the suspension will be lifted or if the director will be permanently dismissed. Unless otherwise stipulated in the relevant arti - cles of association, the GMS attendance and voting quorum for the appointment and dismiss - al of BOD members shall be a simple majority. 4.5 Rules/Requirements Concerning Independence of Directors The Company Law does not recognise the con - cept of independent directors, and, therefore,
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